Why the Change?Without sitting in on top secret meetings at NVIDIA, all we can do is speculate about why NVIDIA has moved away from providing chipsets for the AMD market. It seems very strange that they would let go of the impressive marketshare numbers that they once commanded, as well as the brand loyalty a lot of people have shown NVIDIA. I am sure many of us know users and consumers who will not go with an Intel based CPU, but do not want to touch any AMD chipsets or video cards because they have this brand loyalty to NVIDIA products. And certainly I know more than my fair share of users who are seriously unhappy with the southbridge performance on current AMD based chipsets. While NVIDIA has not had a sterling record when it comes to issues with SATA corruption, their overall performance often makes up for a handful of users that have actually experienced the problem.
I would consider the nForce 590 SLI to be the last real enthusiast level product for the AMD space that NVIDIA released. While the 780a and 980a are also considered enthusiast class products, they don’t seem to hold the same halo effect that the 590 SLI did.
Another topic that has been brought up is that of the lower margins on chipset products, as well as how exciting it is to be offering what is quickly becoming an I/O manager now that a lot of traditional motherboard chipset functionality is being integrated onto the CPU. Margins on these products were rumored to be in the 10% to 15% range. This is not exactly an inviting number to companies like NVIDIA, but when you consider how many actual CPUs AMD is shipping per quarter, and how high NVIDIA’s marketshare was, that is a significant amount of revenue that NVIDIA is giving up.
NVIDIA’s focus right now is obviously on Ion, which they are now using as a more pervasive brand in current and future products. Getting into the Intel chipset field is one that can net more money overall, as Intel controls around 78% of the x86 processor business. There are some unfortunate consequences to this new “match made in heaven” for NVIDIA. First off the 780i and 790i chipsets have not been flying off the shelves. The X48 and P45 chipsets are dominating the field which the NVIDIA 700 series of chipsets were aimed at. While NVIDIA is gaining a lot of ground in the Intel integrated market, the margins on those products are again lower than the mainstream and enthusiast offerings. The 780i is unpopular due to the fact that it is a rebranded 680i, and it uses the hot and power hungry nForce 200 bridge chip to attain PCI-E 2.0 functionality. The 790i also has not taken off due to its overall price and DDR-3 support. There are in fact only a handful of manufacturers that even offer a 790i product for sale.
The really large problem for NVIDIA in this particular marketplace is that LGA-775’s days are numbered. All new enthusiast class processors released from Intel will go to the current LGA-1366 socket. LGA-775 will be replaced as the mainstream socket for Intel late this summer. Guess what? NVIDIA does not have a DMI interface license from Intel, and their big legal battle right now with Intel is for the right to produce chipsets that will work with the upcoming midrange parts from Intel. NVIDIA has been quoted in saying that DMI is the future, and that they won’t be producing a QPI based chipset. Unfortunately, they appear to be producing neither.
It is quite odd to think that NVIDIA abandoned the AMD market because they felt that it was turning into a basic I/O style chip with low margins and decreased functionality. The irony of course is that they jumped ship from where they were the undisputed leader in AMD CPU based chipsets to Intel, which is actively taking all northbridge functions and integrating them into their CPUs. With the upcoming release of Lynnfield, Intel is putting PCI-E functionality into their CPUs. In 2010 Intel will be putting graphics on their CPUs as well.
The nForce 680i was THE enthusiast motherboard of choice for the latest Core 2 Duo chips from Intel. Unfortunately its release was marred with SATA corruption issues, but those were eventually worked out. Still, this was the beginning of the end of top tier support for SLI on AMD products.
Taking that one step further, we can take a look at graphics. AMD became a platform company with the purchase of ATI. CPUs, chipsets, and GPUs were now all provided by AMD to consumers and OEMs who wish to invest in that top to bottom strategy. By packing up their toys and leaving, NVIDIA has then given the GPU portion of AMD a lot more impetus and likely marketshare gains in AMD CPU based systems. The second bit of irony here is that NVIDIA jumped ship to go to the Intel side… which of course is trying to become a graphics card power themselves with the upcoming Larrabee architecture.
The final piece in this line of thinking is the lack of a QPI based chipset from NVIDIA. This means that there are no native NVIDIA SLI solutions for the i7 processors. What NVIDIA has done to rectify this situation is to license SLI support to X58 chipsets from Intel. Individual motherboard manufacturers can enable the functionality, but we obviously do not have the specifics involved with these licensing agreements. If the DMI issue is not resolved, then we again may see SLI being licensed on P55 parts, with the real kicker being that the two 8X PCI-E connections will be coming directly from the Intel Lynnfield CPU.
In retrospect, and certainly from this position, it appears as though NVIDIA has given up a sure thing due to the ambition of becoming a big player in a new market. The way things have shaken out so far is that NVIDIA has lost their overwhelming marketshare in the AMD space, and have gained relatively little in the Intel space. While the Ion platform certainly has made some very big inroads, the future of that chipset is very much in doubt with Intel moving away from LGA-775 and the front side bus that will see its last gasp in the Core 2 series of products.